Keep in mind that the CPI number on Tuesday will have a certain amount of influence on the market people will be paying close attention to the Federal Reserve and how they are behaving more than anything else.
Keep in mind that the CPI number on Tuesday will have a certain amount of influence on the market people will be paying close attention to the Federal Reserve and how they are behaving more than anything else. After all, there are a lot of questions as to how hawkish they will be next year, and whether they have the wherewithal to stay tighter for longer than traders realize. I do believe there is the real possibility of the market being somewhat shocked, but almost as soon as this will be over, we will then have the European Central Bank meeting the next day. While that won’t necessarily be a major driver, it could have a bit of a knock-on effect over in this market.
Another thing to keep a close eye on is the fact that we are stuck between the 50-Day EMA and the 200-Day EMA. These indicators tend to be widely followed, so it does tend to cause a bit of noise here and there when we are between them. In that scenario, it’s very likely that you will get a bit of a squeeze, but once we are through this week there probably will be a whole lot to move the market. A lack of volume and liquidity will almost certainly cause major issues.
With that being said, I think most people can focus on the next couple of days, and then write it off until early to mid-January. Markets that are illiquid can be extraordinarily volatile on unsuspecting traders due to unforeseen news. Because of this, you should be cautious with your position size more than anything else this time of year.
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